Malaysian palm oil giant IOI to conduct audit after report alleging labor abuse



Workers stand near palm oil fruits at a palm oil factory in Sepang, outside Kuala Lumpur, February 18, 2014. REUTERS / Samsul Said

KUALA LUMPUR, July 2 (Reuters) – Malaysian palm oil giant IOI Corp (IOIB.KL) will undergo an audit to assess the compliance of its labor policies and working conditions on its plantations, announced Friday the cabinet, following a report by a human rights group alleging violations.

Helsinki-based Finnwatch on Wednesday released a report alleging that Indian migrant workers in an IOI area face poor living conditions, paid high recruitment fees and were paid below minimum wage . Read more

The IOI said it takes the report’s findings seriously and will work to improve the implementation of its labor policies and working conditions.

“Over the next few months, IOI will undergo an audit overseen by one of our major clients and assisted by a reputable international labor rights consultancy,” he said in an exchange brief. He did not name the client and the consulting firm.

The audit will seek to determine any non-compliance with its labor policies or unsatisfactory working conditions facing its 16,000 workers in Malaysia, the company said.

The statement came a week after the IOI said it would assist with any investigation after US Customs and Border Protection (CBP) said in a letter to an activist it was investigating the company over allegations of forced labor. Read more

The company denied Finnwatch’s accusation that workers had to pay recruitment fees. He said the workers had instead paid “illegal moneys” in their home country to strangers, which is beyond the jurisdiction of the IOI and should not be considered such charges.

The IOI underscored its commitment to make ex gratia payments to workers who were billed for fees before introducing a no recruitment fee policy in 2017. It said the 918 workers eligible for the payment had been paid in June.

He said workers were guaranteed to receive the minimum wage and had issued a directive to allow them a transparent process for them to check their working hours and calculate their wages.

Reporting by Mei Mei Chu Editing by Ed Davies

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